Hilfswerk Austria International
“Elaina Consulting” S.R.L.

an easy to understand

BUSINESS GUIDE
by Elena Catisev and Dia...
ABBREVIATIONS:
AGEPI – Agenţia de Stat pentru Proprietatea Intelectuală
Art - Article
CAEM – Classification of Economic Ac...
An easy to understand BUSINESS GUIDE

CONTENTS:
1.

What does business mean?

2.

Is entrepreneurship for you?

4

3.

Whe...
Dear reader,
This guide has been developed within the “Remittances Developing Moldovan Communities” Project, with
the fina...
An easy to understand BUSINESS GUIDE

What do we intend by this guide?
1.
2.
3.
4.
5.
6.
7.

To help you understand whethe...
1. What does business mean?
The word “business” in English means “the condition of being busy,” that is
business = to make...
An easy to understand BUSINESS GUIDE

Own business

I AM OFTEN
TELLING TO
MYSELF

I LIKE

TOTAL

YES

NO

Usually, I manag...
3. When do you launch your business?
As soon as possible, as the older you get, the harder it is to assume risks. You get ...
An easy to understand BUSINESS GUIDE

2.

You work for others

You launch a business

Advantages

Disadvantages

You accum...
4. What field do you choose for your business?
Part of the success in business is due to the fact that you like what you d...
An easy to understand BUSINESS GUIDE

And last but not least, assess your values, because although people speak about ethi...
In order to know the exact name of the field of activity you want for your business, access the CAEM Classification.

CAEM...
An easy to understand BUSINESS GUIDE

Possibilities to enter the business world
Options

Advantages

Disadvantages

Create...
In brief about franchise
Franchise is a system of contractual relationships between enterprises, in which the party called...
An easy to understand BUSINESS GUIDE

6. How to identify a business idea?
Business ideas can be inspired from:

Yours and
...
What business ideas would function in the rural area?
When starting up a business in the rural area, one has to first of a...
An easy to understand BUSINESS GUIDE

Mark every idea: 5 – for certain, 4 – yes, 3 – don’t know, 2 – don’t think, 1 – no w...
7. What legal form of organization is appropriate for your firm?
Ai 2 opţiuni de bază, să faci afaceri în calitate de pers...
Through the founder’s property

Responsibility for bonds

Structure

Property made up of the
founder’s own goods
Single fo...
Individual Enterprise or LLC?

IE
+ No minimum initial capital is needed.
+ There are no restrictions as regards the goods...
GHIDUL ANTREPRENORULUI pe înţelesul tuturor

8. How do you register a firm?
STAGE 1: Get ready
What do you need to have wi...
STAGE:

Wait

The CIS checks if you have any
debts to the national public budget
and whether you have previously
registere...
GHIDUL ANTREPRENORULUI pe înţelesul tuturor

Articles of incorporation will be issued to the administrator, because accord...
After you have registered your firm with the CNAM, CNAS and the BNS:

IFS

For the fiscal visit act
Registration Certifica...
GHIDUL ANTREPRENORULUI pe înţelesul tuturor

10. What mandatory payments, taxes and fees do you have to pay?
Taxpayer, sub...
Taxes and fees

(

www.fisc.md )

Income tax 7% of the ATI for peasant farms
12% of the ATI for legal entities
SMEs, non-p...
GHIDUL ANTREPRENORULUI pe înţelesul tuturor

11. What reports, declarations, basic forms do you have to submit?
Territoria...
Documents you have to submit to the publishing house when placing the order:
1. Registration certificate (original and cop...
GHIDUL ANTREPRENORULUI pe înţelesul tuturor

As for the rest, for cash settlements, you must have a cash register (CCM – c...
Advantages of “1C: Contabilitatea 8”:
•
•
•
•
•

All records are made in one software;
Automation of the organizational an...
GHIDUL ANTREPRENORULUI pe înţelesul tuturor

13. What is the authorization procedure?
After the state registration, the en...
PFor the newly built, reconstructed, reprofiled, upgraded (primarily) the authorization shall be issued at the
commissioni...
GHIDUL ANTREPRENORULUI pe înţelesul tuturor

14. What is the licensing procedure?
In order to be issued a license, legal e...
The application shall contain:
• formularul cererii, prin care se solicită înregistrarea mărcii;
• reprezentările grafice ...
GHIDUL ANTREPRENORULUI pe înţelesul tuturor

How many people do you need to start a business?
When starting a business, yo...
DIRECTOR

SECRETAR

BIROU JURIDIC

ACCOUNTANT

RELAȚII CLIENȚI

MANAGER

SUPERVISORS

INSTRUCTORS

PERSONAL CURĂȚENIE

C P...
GHIDUL ANTREPRENORULUI pe înţelesul tuturor

When recruiting, you must have all information about the features of the posi...
Useful tips:
• Do not hurry to employ;
• Say NO to nepotism;
• Pay attention to young people who have the potential and wi...
Business Guide an easy to understand
Business Guide an easy to understand
Business Guide an easy to understand
Business Guide an easy to understand
Business Guide an easy to understand
Business Guide an easy to understand
Business Guide an easy to understand
Business Guide an easy to understand
Business Guide an easy to understand
Business Guide an easy to understand
Business Guide an easy to understand
Business Guide an easy to understand
Business Guide an easy to understand
Business Guide an easy to understand
Business Guide an easy to understand
Business Guide an easy to understand
Business Guide an easy to understand
Business Guide an easy to understand
Business Guide an easy to understand
Business Guide an easy to understand
Business Guide an easy to understand
Business Guide an easy to understand
Business Guide an easy to understand
Business Guide an easy to understand
Business Guide an easy to understand
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Business Guide an easy to understand
Business Guide an easy to understand
Business Guide an easy to understand
Business Guide an easy to understand
Business Guide an easy to understand
Business Guide an easy to understand
Business Guide an easy to understand
Business Guide an easy to understand
Business Guide an easy to understand
Business Guide an easy to understand
Business Guide an easy to understand
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Business Guide an easy to understand

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Publication produced within the project "Remittances Developing Moldovan Communities" implemented by Hilfswerk Austria International in partnership with the National Assistance and Information Centre for NGOs in Moldova – CONTACT with financial support of European Union.


The views expressed in this publication belong exclusively to authors and do not necessarily reflect the views of the European Commission.

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  1. 1. Hilfswerk Austria International “Elaina Consulting” S.R.L. an easy to understand BUSINESS GUIDE by Elena Catisev and Diana Jumiga A study produced within the “Remittances Developing Moldovan Communities” Project, implemented by Hilfswerk Austria International in partnership with the National Assistance and Information Centre of NGOs in the Republic of Moldova - CONTACT, with the financial support of the European Union Opinions expressed in this study exclusively belong to the authors and do not necessarily reflect the point of view of the European Union. This project is funded by the European Union Project implemented by Hilfswerk Austria International Delegation of the European Union to the Republic of Moldova 12, Kogalniceanu Str, Chisinau, MD-2001, Republic of Moldova Tel: (+373 22) 50 52 10 Fax: (+373 22) 27 26 22 85, Alexandru cel Bun Str., Chisinau, MD-2012 Republic of Moldova Tel: (+ 373 22) 21 25 41 Fax: (+ 373 22) 21 25 54
  2. 2. ABBREVIATIONS: AGEPI – Agenţia de Stat pentru Proprietatea Intelectuală Art - Article CAEM – Classification of Economic Activities in Moldova NPHC – National Public Health Centre IEC – Individual Employment Contract CIS – State Chamber of Registration LC – Labour Code CNAM – National Health Insurance Company CNAS – National Office of Social Insurance BNM – National Bank of Moldova BNS – National Bureau of Statistics IFS – State Tax Inspectorate SMEs – Small- and Medium-sized enterprises IE – Individual Enterprise K - capital Max – maxim CCM – cash control machine Min – minim No – number JS – Joint Stock Company LP – Limited Partnership GP – General Partnership NAS – National Accounting Standards LLC – Limited Liability Company
  3. 3. An easy to understand BUSINESS GUIDE CONTENTS: 1. What does business mean? 2. Is entrepreneurship for you? 4 3. When do you launch your business? 6 4. What field do you choose for your business? 8 5. How can you get into the business world? 10 6. How do you identify a business idea? 13 7. What legal form of organization is appropriate for your firm? 16 8. What is the registration procedure of a firm? 19 9. What do you do after your firm is registered? 21 10. What mandatory payments, taxes and fees will you have to pay? 23 11. What reports, statements and basic forms will you have to submit? 25 12. What documents and software will you need for accounting? 25 13. What is the authorization procedure? 29 14. What is the licensing procedure? 31 15. What is the trademark registration procedure? 31 16. How do you manage human resources? 32 17. How to promote and sell your product/service? 47 18. How to develop a financial plan? 54 19. What to write a business plan? 61 20. Where to find money for your business? 63 21. Ethics and social responsibility in business. 86 22. Success and failure in business. 87 ANNEXES: 1. Capacity assessment test for entrepreneurs 90 2. Territorial offices of the State Fiscal Inspectorate 91 3. Territorial Agencies of the National Health Insurance Company 92 4. Territorial Agencies of the National Office of Social Insurance 92 5. BNS (National Bureau of Statistics) 96 6. Financial Indicators 97 7. Normative framework for entrepreneurs 97 8. Business plan notebook 99 9. Business plan model 107 10. Useful links 133 BIBLIOGRAFIE 134 CD cu mostre de acte, formulare, legi etc. 1
  4. 4. Dear reader, This guide has been developed within the “Remittances Developing Moldovan Communities” Project, with the financial support of the European Union. Why? To motivate you, a beneficiary of remittances, to invest in business the money sent by your relatives from abroad. Did you know that? Approximately half a million of Moldovans (25-30% of the population) work abroad. According to the World Bank Report, Moldova is one of the leaders as concerning the share of remittances to the GDP (23.2%), ranking second after Tadjikistan. According to data by the National Bank of Moldova, in the first trimester of this year, the amount of money remitted to Moldova from abroad via banks stood at USD 288.72 million. Evolu on of remi ances in Moldova 1,66 1,45 1,18 1,24 27,40% 2008 2009 2010 Remi ances, billion USD 21,40% 23,20% 2008 2011 21,70% 2009 2010 2011 Remi ances, % in GDP ÎIn the rural area, the share of remittances to the total product is even higher, being an important and stable income source for more than 25% of localities and an essential poverty prevention factor. As you notice, Moldova’s economy strongly depends on remittances, but unfortunately, only 7% (officially) of the money of our fellow countrymen working abroad is invested in business to generate new incomes and to contribute to the country’s development. Use of remittances in Moldova What do you choose? 1. To spend the money you receive from your relatives abroad in order to buy current consumption products, bringing you momentary satisfaction only? Business 7% Savings 21% or Current consum.72% 2 2. To invest remittances in your business and earn more money, create new jobs, contribute to the welfare of citizens, hence, develop Moldova’s economy?
  5. 5. An easy to understand BUSINESS GUIDE What do we intend by this guide? 1. 2. 3. 4. 5. 6. 7. To help you understand whether business is for you To show you that it is not difficult at all to launch a business in Moldova To offer you the maximum of useful information, so that you save money for consultancy services To show you where you can access money when you start your business To give you business ideas where you could invest remittances To develop your entrepreneurship skills To give you in the annexed CD the templates of documents you will have to work with What can you learn from this guide? 1. that money should not be spent, but invested in a business to generate more money 2. that launching a business in Moldova is interesting, accessible and profitable 3. that there are many opportunities to invest in Moldova 4. that state-run and international organizations in Moldova assist you through various domestic business funding and support programmes 5. that your business can provide you with material and spiritual satisfaction 6. that your business provides you with a job and stability in the future 5 reasons making this guide worth to be read: 1. You will get concrete answers to questions you might have at the start of your business 2. Minimum theory, maximum practical information 3. Few words, plenty of schemes and graphic presentations 4. Accessible and easy to understand language 5. The information we give you in a schematic way will be useful for you in the future and will help you save money, time and energy. Should you have any questions in the future, please do not hesitate to contact the team of experts from “Elaina Consulting” S.R.L. Chisinau, 71, A. Mateevici Str., office 8a, Republic of Moldova, MD-2009 Tel. 022 24 00 26, 07988098 www.elaina-consulting.com And last but not least, author Elena Catisev and co-author Diana Jumiga, together with the team “Elaina Consulting” SRL, the Public Association Hilfswerk Austria in Moldova and the European Commission wish you good luck and success with your business Remember: The most terrible thought you must be afraid of is to not be wrong. Only a person, who does nothing, is never wrong. You should rather be afraid that after 10, 20, 30 years of work in a company you might wake up pointing your finger at the TV and saying: “that was my idea.” Read this guide, invest remittances in your idea and make money! Be a good example for the others, help yourself and help your country. 3
  6. 6. 1. What does business mean? The word “business” in English means “the condition of being busy,” that is business = to make money on your own from the fact of being busy. You do not go to work, you do not do what you are being told to and you do not wait for somebody to pay the salary established for this but You decide on your own what needs to be done, you work as much as needed, to be able to make your own salary that you want to get. Entrepreneur = a person who undertakes the risk in the context of organizing a new enterprise, creating a new product/ service, is an innovator, shows initiative, invests means, applies skills and undertakes responsibilities for possible failure, in order to make money and satisfy his/her own interest, by observing the law. Law on entrepreneurship and enterprises No 845 of 03.01.1992 2. Is entrepreneurship for you? We cannot classify the pros and cons for entering the business world. At the end, all depends on WHAT YOU LIKE the most. We can offer you a check list to help you make a reasonable decision. Tick off all phrases describing you and count how many of YES and NO you get. Own business YES NO Work for myself. Work when I want, the way I want and with whom I want. I create new jobs and feel myself useful in society. Unlimited earnings (MDL 0, MDL 1 million, etc.). Take my salary when I want. Have employees reporting to me on the assigned tasks. Create by myself my working conditions. Take my salary only when my firm has profit (I bring money to the firm – I take my salary, I do not bring money to the firm – I do not take my salary). Work as much as needed. Risk investing time and money, although the result is not guaranteed. Have no guaranteed vacation, trimestral bonuses. Have no stable schedule. Sometimes, have no time for my family duties. Search for clients on my own. Work in stressful conditions, be open for big physical and psychical efforts. I WANT TO I AM READY TO 4 Work for the others. Avoid risks. Have a stable schedule, vacation, salary, trimestral bonuses. Have time for all family responsibilities. Serve clients found by others. Have a limited earning (e.g., MDL 3,000 / month),even if you have worked more than stipulated in the contract. Report to the boss and write reports Take the money on a certain date only. Do not take advance money from my salary. Work when, in the way and with whom others tell me. Be subordinated to my boss and report to him when he asks. Work under the work conditions created by others.
  7. 7. An easy to understand BUSINESS GUIDE Own business I AM OFTEN TELLING TO MYSELF I LIKE TOTAL YES NO Usually, I manage to do what I intend to. I am confident in my own capabilities. I am ready to start from the beginning in case of failure. My family supports me. I have successful people I can learn from and who can encourage me. I want to make my salary on my own. I have a lot of initiatives; I am an adventurer and innovator. I am healthy; I can cope with the stress for a longer period. I can control myself. I have a passion for business, for an active and risky living. I do not believe in my capacities of being an entrepreneur. I let my hands down at the first failure. Family duties are a priority for me. I am surrounded by people who have never done business, but they give me advice demotivating me. I want somebody to pay my salary. I get ill frequently, I have a heartache, I am stressed, and I fall into depression. mobilising financial, material and human resources. Making decisions. being creative. being mobile. developing myself. knowing all my weaknesses and strengths. Being the director, the person everybody listens to. ă. YES being provided with material, financial and human resources to carry out my activity. fulfilling somebody’s indications. avoiding the responsibility of making decisions. Be an expert in one field only. NO If No<Yes, then the time for you to open your own business has not come yet. Come back to this list when you will feel you can get more than you do at your current work place. If Yes>No, then business is for you. But in order to be fully sure about this, see whether you have the following qualities: Individual features can lead to success only if oriented towards client’s interests. YOU ARE Brave, optimist, active, assiduous, stressresistant, responsible, realist, moderate, communicative, inventive, resourceful, independent, empathic, practical persuasive, economic, punctual, flexible to changes and innovations, with leadership and communication skills, with work experience, you can impose a competitive spirit in the team, you can learn from mistakes YOU LEARN To efficiently plan and manage your time and resources (financial, human, informational) To be able to apply your management, marketing, bookkeeping, etc. knowledge (at least to be able to control the others to make sure they do a good job). Business people are those who apart from their natural talent, WORK to CONTINOUSLY develop their personal and professional qualities, with the aim TO MAKE MONEY and TO GIVE MONEY to those helping them. Researchers confirm that only 5-10% of the population has an entrepreneurial talent. As you have noticed, natural qualities are not sufficient to be an entrepreneur. If you want to have your own business, you will have to develop your skills and learn many new things. „In business, three things are necessary: knowledge, temper and time.” (Owen Felltham) 5
  8. 8. 3. When do you launch your business? As soon as possible, as the older you get, the harder it is to assume risks. You get to have stricter family duties, more complicated responsibilities. At the same time, you need some time to accommodate yourself to the business environment and to get to have some profit. "In the business world, everyone is paid in two coins: cash and experience. Take the experience first; the cash will come later.” (Harold Geneen) Here is a frequent scenario 1. You learn a speciality, graduate from a faculty (3-5 years). You learn You work for others 2. You work for a company, apply your knowledge from the university, and learn new things (2-4 years). 3. You launch your own business and apply the knowledge from your previous work place. 4. You learn from your own mistakes, you accumulate a valuable experience and new knowledge (5 years). 5. You sell your knowledge at a good price through the services provided by your company. You launch your own business 6. When you get bored of your own business, you can work for other companies for a much higher salary, or you can work as an independent expert. 7. You learn what you strictly need. All these stages fit within a cyclic process. The start point depends on your aspirations and circumstances of your own development. You can choose your own scenario, by analysing advantages and disadvantages of each start point. 1. You learn You work for others You launch a business Advantages Disadvantages You already have a theoretical and practical basis: you have accumulated knowledge at the university and at your previous work place. You already know the mistakes You save time when planning and managing the business. You waste about 10 years by sitting at the desk and investing your potential in the success of another company. You become more reasonable, hence it is getting harder for you to undertake risks and cope with failure. You start your business when you already have to create a family and you have many responsibilities related to it. 6
  9. 9. An easy to understand BUSINESS GUIDE 2. You work for others You launch a business Advantages Disadvantages You accumulate practical knowledge to maximum in a given field. It’s easier for you to identify the speciality to learn and that is useful to you. You develop faster your skills. You make money while others are learning, you accumulate capital for your own business. 3. You launch the business You learn You learn You feel embarrassed for not having an education degree/diploma. Salary is lower compared to the other qualified employees. Insufficiency of theoretical knowledge. Insufficient quality of provided services. You need more time and consultancy to perform your tasks, and all these cost. You work for others (by providing services). You work for others (by providing services) While others learn theory and invest their potential in the development of already existing companies, people choosing this scenario dedicate 5-10 years of their career directly to their own business, invest these years in experience, in studying the market, in adjusting themselves to the market, in developing the product/service, concurrently learning what they need for the moment (from training courses, consultancy provided by specialists, etc.). Their success depends to a great extent on their self-discipline, continuing information, intuition and search for advice from specialists. The paradox is that these adventurers (usually aged between 18 and 25 years old) rely on their enthusiasm rather than on knowledge, therefore for them it’s easier to cope with some eventual failure and to try again without any hesitation. They are more courageous in implementing innovative plans, as they are less interested in risks and are more attracted by challenges and the will to earn more money and to be directors, to be admired for their spirit of initiative and for their capacity to mobilize all available resources. Advantages Disadvantages The earlier you start, the farther you will get and will obtain the wanted results. You have the occasion to learn from your own mistakes. You are more inclined to take your chance. You mobilize yourself better in case of failure, as you take it as a challenge. You learn as you work, from experience, while others have theoretical knowledge only. You have more time to dedicate yourself to your business, to develop it and make it profitable. You subscribe to courses already knowing what exactly you need and you benefit to the maximum from this. The risk to make mistakes because of the lack of theoretical and practical knowledge. Lack of trust from the others, they do not always take you seriously. You do not have sufficient financial resources. Hence, given that the third scenario has sufficient advantages, we encourage you to not waste your time and to make a decision regarding the launch of your business as soon as possible. And do not forget: “Time is the measure of business.” (Francis Bacon) 7
  10. 10. 4. What field do you choose for your business? Part of the success in business is due to the fact that you like what you do and you can do what you like. It is important to choose the field that would match your capacities and aspirations, a field you would see yourself in, you feel confident about and enjoy it. This is the graphical representation of the essential factors in choosing a career, respectively, an activity field. Organisation Team work Initiative Leadership skills Negotiation Communication IT skills YOUR SKILLS AND CAPACITIES Relocation capacity Business Socia Close to home YOUR LOCATION FACTORS IN QUALIFICATION+ EXPERIENCE CHOSING THE CAREER Art Nature Science Technologye material benefits CONTACTE Parents YOUR TALENTS AND WILLS Friends YOUR PERSONALITY Reflexive Affective Sensorial YOUR VALUES AND MOTIVATION Intuitive Introvert / extravert Safety (of the future) Prestige Helping the others Independence Source: http://www.la-psiholog.ro/info/alegerea-carierei Also, personality psychology tests and career guidance tests will help you. Here are a few tests you can do online and will get an immediate interpretation of results: MBTI personality test (Jung) Professional interests test EQ Emotional intelligence test Capacity assessment test http://www.lapsiholog.ro/testepsihologice/testpersonalitate-mbtijung-16-tipuri http://www.lapsiholog.ro/testepsihologice/testinteres-profesional http://www.lapsiholog.ro/testepsihologice/test-eqinteligenta-emotionala Intelligence, logic, numerical reasoning, verbal reasoning, artistic talent, etc. ANNEX 1: Entrepreneurial capacity assessment test 8
  11. 11. An easy to understand BUSINESS GUIDE And last but not least, assess your values, because although people speak about ethics and social responsibility in business, the business world is tough and does not always coincide with your values. For example, a doctor who is ready to help even a patient without money, a teacher who spends time over his schedule to check students’ homework, does not correspond to the business format, where you do nothing if you have no interest or financial benefit from the activity. In business, you will have to give up the free of charge work, refuse clients who have no money and forget about everything that consumes your time without bringing any income. In business, you will have to sue those who do not honour their payment duties, even if they have children and will cry when coming to you, because business is not you, it is a separate entity, a legal entity/private person, with its own commitments to employees, suppliers, who in their turn wait for their salaries, payments, etc. In business, you cannot rely on trust, kindness, friendship, but on concrete contracts, even with the members of your own family or with your business partners. “A friendship founded on business is better than a business founded on friendship.” (John Davison Rockefeller) What are the SMEs? SME = abbreviation for small- and medium-sized enterprises This notion is related to the classification of enterprises following certain criteria. Criteria for Moldova / Enterprises Number of employees Annual amount of sales (turnover) and annual amount of assets balance sheet (social capital) micro small medium big 1-9 10-49 50-249 250... < 3 mln lei < 25 mln lei < 50 mln lei > 50 mln lei Share in the total of registered enterprises Share in the amount of sales by all enterprises Number of employees (jobs) of the total number of employees in the private sector 97,5% (47,3 thousand) 34,6% (71887,6 mln lei) 57,7% (294,2 thousand) SMEs are the most frequently used form of business (in Moldova and the EU); they create the largest share of jobs and produce the largest amount of products and services In order to get inspired of what’s “in fashion” and profitable in terms of fields of activity among the small- and medium-sized enterprises (SMEs), see bellow some statistics for 2011, provided by the National Bureau of Statistics. Fields of activity Trade Processing industry Real estate transactions, rentals, services provided to enterprises Other activities Transports and communications Agriculture, hunting, economy and forestry Constructions Hotels and restaurants Power, gas and water SME structure Income from sales 49,1% 41% 13% 10,2% 7,1% 16,6% 4,4% 11,3% 9% 6,8% 7,8% 5,1% 7,7% 5,5% 1,6% 3,2% 0,4% 0,4% Of these fields of activity, only the last two positions registered losses (did not have any profit). “No nation was ever ruined by trade.” (Benjamin Franklin) Recommendation: Choose that field of activity where your first clients would be your friends, relatives, contacts, colleagues, as well as the fields where you have “relations”, somebody you can rely on, where your friends could give your recommendations and offer you a valuable advice. 9
  12. 12. In order to know the exact name of the field of activity you want for your business, access the CAEM Classification. CAEM Classification. When you choose your activities, try to avoid fields with a high degree of risk, which can cause you losses rather than incomes and eventually could be rejected by banks, should you need a loan. Here are a few of these activities, following the classification by the Forbes Magazine (famous in the whole world for its annual lists, like the list of the largest 2,000 companies in the world and the list of the 100 richest people on the planet): 1. Transports. This includes the taxi, limousine and ambulance businesses. You have to pay high insurance fees, there are losses due to the increase in fuel prices and competition in this area is tough. 2. Clothes stores. Risks here are due to the saturation of the market and fluctuation of sales depending on the season. Small firms may be eclipsed by the giants of the industry; besides, the change in tastes as the time goes endangers the business. 3. Restaurants and bars. This niche suffers the most because the cooked food industry is disappointing, it may suddenly reduce the number of clients due to competition. 4. Communications. This is considered to be a risky field for an independent supplier, because of the presence on the market of big companies, supplying the same services with attractive offers. 5. Tourism agencies and operators. PTo attract clients, agencies have to offer exotic destinations, where the on-line tourism firms are not that efficient. It is more difficult to defeat the scepticism of those clients who believe that travelling on their own is more convenient. 6. Food stores. This is about supermarkets, the sale of fruits and vegetables, where the same problem intervenes: the big chains, already well set up on the market and the risk of the fast spoilage of products. 7. Personal services: cleaning, laundry, shoemaking workshops, etc. Location is essential. Nobody will travel several kilometres to clean up/repair his staff. In this field you can work on attracting clients with low prices, but in this case, the amortization of your investment will be extremely difficult. 8. Car services. All vehicles have insurance, and insurance companies pay the repair costs, but they do not pay too high sums. Besides, most of the local and national dealers have extended their service offer and can cope with a very high number of vehicles, a luxury that small firms cannot afford. 9. Transportation of goods. Fuel price fluctuations make this business a risky one. At the same time, the more and more drastic rules imposed on transporters make this investment even more difficult. 10. Financial services, like currency exchanges, ATMs, money transfers. The multiple frauds make this business a risky one. Also, the increasingly tough legislation makes even some banks to stay away from it. 5. How can you get into the business world? Possibilities to enter into the business world Create a new business Buy an existing business Associate into an existing business Buy a franchise A description of each possibility to enter the business world is presented in the table below. 10
  13. 13. An easy to understand BUSINESS GUIDE Possibilities to enter the business world Options Advantages Disadvantages Create a new business • • • • • • • innovations possibility to choose the types of activity freedom of decision-making independence own management (you employ/discharge whom you want) you do not have to correct somebody else’s faults you improve your self-respect, you get to be admired by the others challenge • • • • • Buy an existing business or associate in an existing business • • • • smaller risk already existing clients You join at an already profitable or developing stage saving time, by joining directly in the development stage • need to repair somebody else’s faults • detailed financial analysis • the risk of not knowing the real reasons that made the former owner sell the business • already established types of activity • you do what you like and what you did not have enough courage to do by yourself • The business is well established already • You have a clear vision over the firm’s weaknesses and strengths • you learn from your partner • you share responsibilities and tasks • you can rely on your partner in case of emergency (he works when you cannot and the opposite) • in a partnership you can have more ideas, common interests, an efficient exchange of opinions • Possibility to come with new proposals regarding the types of activity • decision is made together with the partner, even if this is not convenient to you • You have to share the profit • Difficulties in case of conflict with your partners • Financial analysis takes time • types of activity are already established • a business partner may leave a lot of responsibilities on you, relying on your friendship • • • • • • • • a too high price sometimes • some decision-making restrictions (e.g., related to employment, planning, location, sale of franchise, etc.) • strict observance of some standardised operations • many reports, time consumed • quite costly lawyer’s consultation • this type requires negotiation skills (e.g., to negotiate the contract) Association in an existing business Buy a franchise The right to copy a profitable and successful business You get the know-how, the verified knowledge already created high image exclusive distribution rights (territorial protection) low possibility of becoming bankrupt Partial financing from the franchiser assistance provided by the franchiser (e.g., in marketing, design, training, management consultancy, research, advertising, etc.) bigger own investments (financial, time) higher responsibility more effort many market researches lack of experience In business, sir, one has no friends, only correspondents. (Alexander Dumas) E.g., service provision field (catering, remedial centres, business services, training and education, computers, domestic and social services, tourism, sport, entertainment, car services), retail 11
  14. 14. In brief about franchise Franchise is a system of contractual relationships between enterprises, in which the party called franchiser provides the party called franchisee with the right to produce and/or sell certain products (goods), to provide certain services, in the name of and with the brand of the franchiser, as well as the right to benefit from its technical and organizational assistance. The one who buys a franchise is called franchisee, and the one who sells the franchise is called franchiser. The franchising partners have individual accounts and balances in banks, provide an independent bookkeeping and statistical reporting in line with the legislation of their residence country. Types of franchising Corporate franchising (industrial, manufacturing) Commercial franchising (distribution, services) It provides for the participation of the franchisee in the whole production cycle of the franchiser It provides for the marketing of the finished production (goods) or provision of services by the franchisee a) permanent contacts between the franchiser and the franchisee; b) permanent exchange of information; c) detailed regulation of the activity and high level of responsibility of the franchisee. a) narrow specialization of the franchisee in marketing a certain type of products (goods) or in providing a certain type of services; b) payment of royalties to the franchiser from the total amount of sales; c) franchisee’s risk related to the marketing of products (goods) or provision of services; d) low level of regulation of franchisee’s obligations. Examples: CAMPARI, SCHWEPPES, COCA-COLA, PEPSI-COLA etc. Examples: SANTAL, VERITAS, YVES ROCHER, MC DONALD’S, PIZZA HUT, HERTZ, AVIS, HILTON, HOLIDAY INN In Moldova, the most appropriate is to buy a franchise. Franchise-based businesses in Moldova (franchisee) Mango, Celio, Mexx, Olsen, Sele, McDonald`s, Fornetti, Domestic businesses selling franchises (franchiser) Andy’s Pizza, Fornetti, Alina Electronic, Neuron Grup, Shell, Buon Giorno, Zara, Hugo Boss, Petrom, Xerox, DHL, 1C Pepsi-Cola, Coca-Cola Civil Code (art. 1171-1178) – Franchising contract Law of the Republic of Moldova on franchising 1335-XIII of 01.10.1997 10 reasons to buy a franchise 1. Turnkey business. You exclude all the hard work related to finding the location, negotiating the rent, and employing reliable contractors. 2. Already tested system. By having an already tested system, you exclude all mistakes you may commit. 3. High chances to succeed. If you follow the way set up by the franchiser, you are on the right way to running a successful business 4. Corporate image and recognised brand. Consumers buy already known products, people prefer working in already known companies. 5. It will be easier to get the funding. Bankers pay attention to successful franchise chains (lower risks, in-house 6. Training. The franchiser will teach you how to run the franchise in exactly the same way as the other franchises are managed. 7. Continuous support. You will always enjoy the support from your franchiser and you can ask for assistance the other franchisees any time. 8. Marketing. The franchiser can deal with everything related to marketing or it can give you a model to follow. 9. Exclusive territory. Together with the franchise, you also get the exclusive territory to conduct your business on. 10. You get multiple locations. Owners holding more than one franchise come to administrate more and more locations. In Moldova, a franchise for a restaurant can be purchased for EUR 10,000. Apart from the franchise registration fees, you have to monthly pay 6% of the turnover and 1% for advertising. 12
  15. 15. An easy to understand BUSINESS GUIDE 6. How to identify a business idea? Business ideas can be inspired from: Yours and your friends’ hobbies and pas sions Progress in soci ety, new preference s of consumers Visiting exhibit ions, tîrgurilor, fairs, travels Your work experie nce, other people’s businesses Local economy, daily problems, low-quality prod ucts Mass-media, business literatur e Your values, or values of the firm , of your fiends New legislation, government initi atives Discussions with experts, entrepreneurs, ap plying creativity techni ques ,,All riches have their origin in mind. Wealth is in ideas - not money.” (Robert Collier) If you are a less creative person, there are techniques helping you to identify business ideas. Here are some of them: Brainstorming (every person in the group generates as many ideas as possible, regardless of their quality, nobody is criticising them, let your imagination loose. Subsequently, the best ideas are selected to be applied in practice. This method can also be applied individually). Create and exploit the idea bank (put down the ideas, dreams you have for the moment, all you see and like or you find interesting, and then come back to this folder to inspire yourself) Philips 6-6 (6 persons, each has 1 minute to generate an idea, all say their ideas in turn, it takes 6 minutes) PRES (somebody is proposing ideas, which are rationalized in the group, with good examples given, each participant comes with suggestions) List of consecutive questions (ask yourself why do you want a business, and depending on the answer, formulate another question, so that at the end you come to the business idea) “111 business ideas in crisis times” Eduard Rosca „The rule of my life is to make business a pleasure, and pleasure my business.” (Aaron Burr) 13
  16. 16. What business ideas would function in the rural area? When starting up a business in the rural area, one has to first of all analyse competition in the area he intends to work, the infrastructure, along with the market potential and possibilities to access grants, etc. Here are a few suggestions for business ideas that could function at the rural level: On-line handicraft shop; Mobile vulcanisation services; Car wash; Grow ecological vegetables; Grow seedling; Produce natural juice; Create greenhouses (for flowers, decorative plants, vegetables); Agricultural production storages (with controlled climate); Fruits and vegetables washing services; Artificial football or golf field, to be rented for money; Interior arrangements and open space designs (gardens, parks); Sport hall; Modern tailory; Private kindergarten; Construction and repairs of houses; Mounting and reparation of utility communications (interior power networks, sewerage and water supply, heating systems, etc.); Manufacturing of products and constructions from metal, welding services; Fixing household appliances, radio, TV, video devices; Shoe repair shop; Furniture repair shop; Washing and cleaning services; Hairdresser’s; Pheasants, ostriches breeding; Quails, ostriches, snails, vipers, etc. breeding; Veterinary services; Manufacturing wood products (carpentry); Rural tourism. EXAMPLE: A viper produces 1,5 grams of venom a year, and a gram of venom is sold for 1,000 euro. Vipers grow in glass terrariums and have to be fed twice a month with mice. The optimal temperature in terrariums is between 22-25°C, and a viper brings about 12 broods a year. Venom can be collected a few times per month. Your clients will be representatives of pharmaceutical companies all around the world; therefore it is good to contact companies from various countries to sign pre-contracts. The conclusion of pre-contracts will help you obtain financing, in case you have no funds. Although this is a dangerous business and requires a lot of attention, it could generate high profits Once you have identified the business ideas that you like and meet your personal (family, social, sport, health, personal and professional, etc.) objectives, make a comparative analysis and choose what is more convenient for you. 14
  17. 17. An easy to understand BUSINESS GUIDE Mark every idea: 5 – for certain, 4 – yes, 3 – don’t know, 2 – don’t think, 1 – no way Idea 1 Evaluation criteria 5 4 3 Idea 2 2 1 5 4 3 Idea 3 2 1 5 4 3 2 1 Are you interested in dealing with this type of business? Personal qualities Do you have the necessary knowledge and qualities? Do you have a big potential in marketing? Market requirements Does the market you want to work on have a fast growing pace? Are the materials you need easy to access? Does your idea require high expenditures for advertising? Competition Technology Does your idea have any advantages compared to your competitors? Do you know the technological process? Do you have conditions and the equipment needed for the activity? Is it legal to implement this idea? Can the idea be adjusted? Risk Is the risk related to opening this business high? Is it easy to launch this business? Are the initial expenditures acceptable? Durability Are there financial sources for this business? Is the initial investment recovering period short? Sum of accumulated points Every idea can accumulate 80 points maximum. Choose the idea that has accumulated the most points. Recommendations: Make the decision on your business idea independently; Do not avoid fields with competition; Do not fully copy an already existing business; Do not focus on revolutionary ideas only. You should better try to improve a service or a product that already exists. Apply your creativity to promote a banal idea in an original way; Check if the idea is viable (if you manage to collect the necessary resources to start up the business and to cover the primary investment costs). Read success stories, communicate with people who can inspire you, who are good advisers and reliable allies. “Community delivers creativity”. (Michael Card) “Creativity is thinking up new things. Innovation is doing new things.” (Theodore Levit) How do you protect your business idea? You have a business idea and you have to meet some potential investors. How can you protect your idea, avoid ending up in a situation when the latter implement your idea by themselves (steal it)? In Moldova, there are no laws protecting business ideas. In exchange, we can suggest you some advice you can take into account at your first meeting with the investor: • Do not unveil all the details of your business idea; • Ask an expert or a lawyer to draft for you a contract with exact clauses on confidential data and exclusive intellectual property right; • Identify the elements without which your business could not function, i.e., the “know-how,” and present your idea without unveiling this “know-how.” However, if you want to protect your idea, you could patent it in Russia or Romania, because the Moldovan law does not stipulate this possibility. 15
  18. 18. 7. What legal form of organization is appropriate for your firm? Ai 2 opţiuni de bază, să faci afaceri în calitate de persoană fizică sau juridică. Natural person (Civil Code, chapter I) Individual Enterprise Peasant Farm Entrepreneurial Patent Legal person (Civil Code, chapter II) LLC – Limited Liability Company JS – Joint Stock Societyi GP – General Partnership LP – Limited Partnership Cooperative Law on entrepreneurship and enterprises No 845 of 03.01.1992 Individual Entrepreneur – legally competent natural person, practicing the entrepreneurial activity on his/her own name and risk, without being a legal entity, and is registered in line with the law. Law of the Republic of Moldova on the state registration of legal persons and individual entrepreneurs, No 220-XVI of 19.10.2007 Entrepreneurial Patent – this is a state normative certificate, certifying the right to carry out the type of entrepreneurial activity indicated in it for a certain period of time. Law on entrepreneurial patent No 93-XIV of 15.07.1998 In this law you will find information on the issuance of patents, their validity, as well as the fee and the payment mode for the entrepreneurial patent Peasant Farm – an individual enterprise, based on private property over farmland and other assets, on personal work of the members of a family (members of a peasant farm), with the goal to obtain agricultural products, carry out their primary processing, prevailingly selling own agricultural production. Law on peasant (farmer) farms No 1353-XIV of 03.11.2000 Limited Liability Company – a legal entity, with social capital divided in social parts according to the establishment act and with obligations guaranteed with its patrimony. Law on limited liability companies No 135 of 14.06.2007 Civil Code (art. 145-155) Joint Stock Company is a company with social capital entirely divided into shares and with obligations guaranteed with its patrimony. Law on joint stock companies No 1134 of 02.04.1997 Civil Code (art. 156-170) General Partnership is a company, whose members are practicing entrepreneurship, under the articles of incorporation, in the name of the society and are responsible for the company’s obligations in a solidary and unlimited manner. Civil Code (art. 121-135) Limited Partnership is a company which, in addition to the members who practice entrepreneurship in the name of the society and who are responsible for its obligations in a solidary and unlimited manner (acting partners), also has several funding members (limited partners) who do not participate in the company’s entrepreneurial activity and bear the risk of losses resulting from the company’s activity, within the limit of their input. Civil Code (art. 136-144) Cooperative is the voluntary association of private persons and legal entities, organised on corporate principles in order to favour and guarantee, through the joint actions of its members, their economic, as well as other legal interests. Civil Code (art. 171-178) 16
  19. 19. Through the founder’s property Responsibility for bonds Structure Property made up of the founder’s own goods Single founder or a group of people(ex. family members) The founders are not obliged to participate in the society’s activities. IE + the name of 1 founder at least Family business Agriculture, craft industry, education Individual entrepreneur Registered capital Sector Name Legal forms Subsidiary solidary responsibility through the property of the society. Two months after the approval of the annual accounting report, the members are obliged to recoup losses through additional contributions. The acting partners display solidary and unlimited accountability for the bonds of the associates who are not directly linked to its activity. Variable, from the participation sharee 2-20 private persons or legal entities. A private person or legal entity can associate in only one GP. Every participant can represent the society in relations with third parties. The leadership may be held by 1 person (on a proxy basis) or in a collegial manner. Every member = 1 vote, unless it is stipulated otherwise. Subsidiary solidary and unlimited responsibility of the acting partners for the society’s bonds. The inactive partners are responsible for losses within the limit of their contribution. The society bears no responsibility for the associates’ bonds that are not related to its activity. 20,000 lei Registered capital divided into shares SMore extended and less flexible structure than the LLC. Founded by one or more private persons or legal entities. Closed JSC – not more than 50 shareholders, a limited number of people can buy shares. Open JSC – the rightto estrange shares without any restrictions. Additional rights for the shareholders owning no less than 5% and 10% Of Shares (Civil Code, Art. 167, 168) Through the property of the society, within the limits of the participation share. The society bears no responsibility for the associates’ bonds. The founders of the society are responsible for their bonds. Through the property of the society, within the limits of the participation share Single founder or a number of associates (50 at the most) Variable, from the participation share Not less than 5 members, private person or legal entity (minimum age 16) VVariable, from the participation share Not less than 1 inactive partner and 1 acting partner. 20 people at the most. The acting partners lead. The inactive partners (members financing the business) do not involve in the enterprise’s activity. One and the same person can be acting partner in only one LC and cannot be a member of GP. . In small businesses, in which the associates operate jointly Big enterprises, in the banking sector, telecommunications,. Trade, insurances, furniture production. The most widely spread among small and medium-sized enterprises, in the farming sector, tourism, sociological research, services 5400 lei Co-op + the main goal of the activity To favour and guarantee the conomic and legal interests of the members through their joint actions. Cooperative LC + the name/s of acting partners In small enterprises. Low amount of services provided or produced. Close relations between the founders Limited Partnership GP + name/s of associates General Partnership JSC + name Joint Stock Company LLC + name Limited Liability Company Organizational and legal forms An easy to understand BUSINESS GUIDE 17
  20. 20. Individual Enterprise or LLC? IE + No minimum initial capital is needed. + There are no restrictions as regards the goods that lay the foundation of the business. + It is not requested to create reserve capital. + It is simpler to manage because the founder can manage it on his/her own, or hire a manager (it takes fewer specialists to manage a business), there is less bureaucracy. LLC - Minimum initial capital of MDL 5,400 is needed. - The way money and goods can be used as registered capital is established by law. - It is mandatory to form reserve capital (accounting for 10% of the registered capital) through annual amounts payable of not less than 5% of the net profit of the LLC. - It is more complicated to manage it because there may be several associates, holding various shares in the registered capital; complex legal and financial regulations must be respected (more bureaucracy). Consultancy services are more expensive. + The enterprise is responsible for bonds, with its property only being at stake. The associates bear responsibility for the society's bonds only within the limit of the shares that belong to them. This means minimum risk for the founders. + Banks and creditors find them more trustworthy. - The founder is responsible for the enterprise's bonds, with his/her whole property being at stake, excepting goods which, according to legislation, cannot be followed up. Higher financial risks. The founder may lose the family's goods in case of failure. - It is limited in terms of financing; as a rule banks do not take such enterprises seriously. + (advantages), - (disadvantages) Advantages and disadvantages of small and medium-sized enterprises (SME) SME advantages Relatively more easy business management (less bureaucracy, quicker spread of information, fast decision-making process); More efficient control (less staff, closer interaction with employees, quicker integration of the employees into the team); Quicker integration of the company into the regional network; Enhanced adaptability to economic fluctuations, early compliance with changes in the production process; Quick launch of innovation products/services; Management's promptitude to the need to settle local issues; Production of high-quality goods or provision of high-quality personalized services, the company's uniqueness; Closer cooperation between clients and goods producer/service provider; Lower capital needs, simple production technologies; Quicker capital rotation; Possibility of limiting micro crediting if your own capital is insufficient; Possibility of extending the SME into a big business (for instance, Bill Gates started his business when he was 16, worked out software with some classmates, subsequently he became the founder of Microsoft); tate backs small businesses more often. SME disadvantages The enterprise is dependent on one or more people; Lack of staff having comprehensive management knowledge because of the low number of personnel; The unofficial nature of relations within the SME may tell on the positive development of the business. The owner is busy with urgent daily problems instead of planning the enterprise's activity for a long run; Enhanced competition on the part of bigger companies; More difficult access to big loans, poor financial and technical basis; The need to launch a large-scale advertising campaign in order to remain on the market; Increased risk level (dependence on external factors and not on decision-makers); Drawbacks in the small business legislation. SME role: Creates new jobs, thus decreasing the unemployment rate. Contributes to the country's economic development. Diversifies the range of goods and services on the market, thus promoting innovations. Encourages competition among big enterprises. Promotes rational use of local resources. Facilitates the operation of big enterprises by producing goods and providing services. Enhances the qualification of the staff and trains them for holding posts in big enterprises. 18
  21. 21. GHIDUL ANTREPRENORULUI pe înţelesul tuturor 8. How do you register a firm? STAGE 1: Get ready What do you need to have with you? iIdentity cards of the founders and administrator (if he/she is different from the founder) A list of possible names for the enterprise Documents on the company’s headquarters, which could be: founder’s residence imobilhouse provided by a non-founder physical person (document confirming the property right and notarized decision, by which the founder allows using this house for performing the legal activity); real estate legally rented from a legal entity (notarized rental contract and letter of guarantee of the owner) What do you need to know? Legal form of your firm; The term you want your firm to be opened for. The CIS registers an enterprise within maximum 5 working days (3 working days in the case of an IE) from the date of submitting the whole set of documents. The firm can be also registered in 4 and 24 h), as well as on days off or holidays. Types of activities you want to perform (maximum 5 will be included in the establishment act). Consult the Classification of Economic Activities in Moldova (CAEM) Fees approved by the Government for the paid services provided by the CIS. Registration costs: Registration costs Registration fee Issue of documents Reservation of the name Abstract from the Register Publication in the CIS bulletin Approval of the name at the Terminology Centre Stamp Normal regime 24 h 4h MDL 250 (in 5 days) MDL 54 (IE in 3 days) MDL 108 (5 days) 39 lei MDL 500 MDL 216 MDL 216 78 MDL 252 MDL 54 lei MDL 40 lei MDL 1000 MDL 432 MDL 432 MDL 156 MDL 189 MDL 239 State fees for registration and amendment http://cis.md/content/61 STAGE 2: Act Go to the territorial office of the State Chamber of Registration with the set of documents For addresses, telephones go to http://cis/gov/md/content/68 Telephone for information: 022 274 406 There is also a possibility to register the firm through a representative with power of attorney, as well as the individual entrepreneur can do it on the internet. “Procedure and conditions for the on-line provision of services” http://cis.md/content/60 19
  22. 22. STAGE: Wait The CIS checks if you have any debts to the national public budget and whether you have previously registered any enterprises, which are no longer operating and have not been liquidated in the way established by law. The CIS verifies the name of the legal entity. You have to fill in a registration request according to the provided template. You have to pay the registration fee to the bank and submit the payment note to the CIS. The CIS acceps documents for registration. The CIS checks whether the administrator (another one but the founder) works part time for another unit as an administrator. The CIS issues a certificate allowing you to open a provisional account in a bank and to deposit the social capital. The CIS orders the production of the stamp. The CIS indicates the exact date and hour, the office and the registrar’s name, for you to collect the establishment acts. The CIS registers your enterprise and issues the registration papers Go to the CIS on the established date and time, without delays, with the bank certificate as a proof you have submitted the social capital You have to choose the bank you want to work with and you consign your social capital (minimum 40% for a LLC + the remaining 60% in maximum 6 months from the registration date, the sole shareholder integrally pays 100%). Individual entrepreneurs are denied state registration in the following situations: 1. The physical person is already registered as an individual entrepreneur; 2. The person is deprived, by court ruling, of the right to practice entrepreneurial activities. STAGE 4: Check the registration acts • Decision of the State Chamber of Registration on the registration (coincides with the registration date of the legal person); • Registration Certificate (with a unique identification number IDNO, which matches the fiscal code); • Abstract from the State Register; • Articles of incorporation (Decision on the Establishment, Statute); • Stamp and certificate on the stam manufacturing; • Notice on the registration for tax, statistical, medical and social purposes. 20
  23. 23. GHIDUL ANTREPRENORULUI pe înţelesul tuturor Articles of incorporation will be issued to the administrator, because according to the Civil Code (art.61), the legal entity exercises, from the incorporation date, its rights and fulfils its duties through the administrator. While the individual entrepreneur as the sole founder is also the administrator In the future, you will have to go to the CIS in the following situations: 1. To order an Abstract from the State Register; 2. To register any amendments to articles of incorporation or to data introduced in the State Register (within maximum 30 days after the approval of the amendment decision); 3. Temporary suspension of the activity (maximum 3 years). When changing the headquarters: • You have to inform the CIS and the (territorial) Fiscal Inspectorate about the change in maximum 7 days; • Publish a notification in the Official Monitor. 9. What do you do after your firm is registered? STEP 1: Analyse bank offers in order to open a current account What shall you pay attention to? 1. Bank’s reputation 2. Bank’s location (to be in the area of your work, close to the territorial IFS, CNAS, CNAM) 3. Service fees 4. Products/services provided to legal entities (service of accounts, salary cards, web-client, credits, exchange rates, etc.) 5. Efficiency 6. Customer loyalty programmes STEP 2: Open a current account 1. Go with your articles of incorporation to the bank where you will fill in an application for opening a current account; 2. Return to the bank in about 5 days (after it receives the notification from the Fiscal Inspectorate); 3. Sign the specimen signature forms; 4. Read carefully the contract on opening a current account, sign it; 5. You will be provided with your account’s data. STEP 3: Register your firm with the fiscal, statistical, medical and social authorities Take the originals and copies of the documents mentioned in the scheme on the next page to the following territorial offices: 1. IFS (State Fiscal Inspectorate) – Annex 2 2. CNAM (National Health Insurance Company) – Annex 3 3. CNAS (National Office of Social Insurance) – Annex 4 4. BNS (National Bureau of Statistics) – Annex 5 21
  24. 24. After you have registered your firm with the CNAM, CNAS and the BNS: IFS For the fiscal visit act Registration Certificate Abstract from the State Register Decision on the registration of the enterprise Statute / Articles of incorporation Identity card of the founder Identity card of the administrator Employment order of the bookkeeper Rental agreement of the subdivision, offices, branches Codes of activities from the Notification on the Fiscal, Statistical; Medical and Social Registration 2 plastic fastener folders For the subdivision’s registration certificate (original+copy): Identity card Rental agreement Registration certificate Abstract from the state register Filled in form Within maximum 10 days after the issue of the registration certificate: CNAM Identity card Registration certificate Filled in form Within maximum 10 days after the issue of the registration certificate: CNAS Registration certificate Abstract from the State Register Decision on establishment Notification on the fiscal, statistical, medical and social registration Bank account details Certificate on the stamp production Identity card of the founder/founders Taxpayer’s form to the social insurance budget (filled in) Copies must have the firm’s stamp applied on them Within maximum one month after the issue of the registration certificate: BNS 22 Notification on the fiscal, statistical, medical and social registration Registration certificate Abstract from the state register
  25. 25. GHIDUL ANTREPRENORULUI pe înţelesul tuturor 10. What mandatory payments, taxes and fees do you have to pay? Taxpayer, subject to taxation = the person who is obliged to pay taxes and fees Compulsory payments The shares of compulsory payments are established on a yearly basis by Government Decision and are stipulated in: Tax Code of the Republic of Moldova (2012) Law on state social insurance budget for 2012 No 270 of 23.12.2011 201 Law on compulsory medical insurance funds for 2012 No 271 of 23.12.2011 23% of the labour remuneration fund for each employee, calculated monthly, paid by the employee on a monthly or quarterly basis up to the 10th of the month following the reporting period Compulsory social insurance contributions 6% retained from the employee’s salary. Individual entrepreneurs and patent holders – 4,704 lei per year, pay every month not less than 1/12 of the amount, up to the 10th of each reporting month For what? Allowances, aids, pensions, for preventing diseases and for the recovery of labour capacities, death allowances. For the insured persons – 7% (3.5% paid by the employer, 3.5% by the employee), monthly, when the salary is paid. Compulsory medical insurance premiums Individual entrepreneurs and patent holders – 2,982 lei per year, payment is performed on a yearly basis, within 3 months after the day when the law on compulsory medical insurance fund for the respective year enters into effect). For what? To cover costs related to the treatment of diseases and affections of the insured persons Taxes and fees Tax Code of the Republic of Moldova (2012 (2012) state local Income tax Tax on immovable property VAT (Value Added Tax) Territory development tax Excises Tax for commercial units and social service provision units Private tax Customs, road, etc. tax Tax for passengers of motor transportation service on localities’ routes Tax for the use of natural resources, market tax, parking tax, resort tax, advertising placement tax, on local symbology, etc 23
  26. 26. Taxes and fees ( www.fisc.md ) Income tax 7% of the ATI for peasant farms 12% of the ATI for legal entities SMEs, non-payers of VAT: -up to 100,000 of profits – 3% of the operational activity -100,000 / 600,000 – can chose the 3% taxation regime For physical persons: 7% of the ATI <= 25,200 lei 18% of the ATI > 25,200 lei Legal entities shall submit the declaration up to the last day of the month following the payment, based on the IRV09 report, to the IFS branches. Physical persons have to submit the declaration up to March 31 of the following year (in case he/she had 2 or more jobs in different enterprises over the year). Tax on immovable The share established on an annual basis by the LPA property ( Tax Code, art. 280) (for agricultural or 0.05% - 0.3% of the taxable basis industrial land plots, buildings, constructions (estimated value of assets on January 1 of the fiscal year) ATI (annual taxable income) ATI = gross income – deductions – exemptions Deductions = ordinary and necessary expenditures by taxpayers for the activity of the enterprise. Exemptions: 8,640 lei/year personal exemption for physical person ( Tax Code, art.33 FC) 1,920 lei per year/each dependent ( Tax Code, art.35) 8,640 lei/year exemption for spouse who works, but does not benefit from exemptions. Payment in 2 equal shares (up to August 15 and October 15 of the fiscal year). Those who integrally pay the tax by June 30, are entitled to a 15% discount from the tax. apartments) Private 1% of the sale value of assets subject to privatisation. tax 5% of payments are retained at transfer, to cover costs related to the restructuring or privatisation of the object. Land 10-30 lei for each 100m2, plus other categories of owners in tax other localities are paying other taxes. Excises The share of excises ( Tax Code, art. 122): -in lei per meas.un. in natural expression (e.g., 1.85 lei per 1 litter of malt-made beer). -in % from the value in lei of the goods, without taking into account excises and the VAT (e.g., 25% of the value of a fur clothing) (for certain consumption goods) Value Standard among: 20% of the value of goods imported and/or Added Tax supplied in Moldova. (VAT) Compulsory: supplies >600,000 lei (in the fiscal period) Optional: supplies 100,000 lei – 600,000 lei VAT exemption: Tax Code art. 103 Reduced rates: 88% bread, breadstuffs, diary, certain medicines 6% natural, liquefied gas 0% goods and services for export, power and thermal energy for the population, others can be found in Tax Code, art.104 Tax on 1% of the total income of the enterprise. advertising activity Customs tax, road tax Annexes 1-6, title IX of the Tax Code Territory Average quarterly number of the staff list and founders that development tax are not included in the staff list – 20 lei / person. Tax on trading and/or Share for towns, villages. social services units It is different from town to town. To be paid to the state budget or to the budget of the administrative-territorial unit before the conclusion of the buy-sell agreement of public property assets. The exact amount of the land tax and tax on immovable property are established on an annual basis by the representative authorities of the local public administration. Registration as excise payer: before starting the activity, it is necessary to get the excise certificate by filling in an application at the State Tax Service ( Tax Code, art.126 – list of necessary documents) To be paid on a monthly basis. Registration as VAT payer: Fill in the application to the IFS before the last day of the month when the amount of 600,000 lei was exceeded. To be paid before the last day of the following month. Paid on a trimestral/annual basis up to the last day of the following month. Paid on an annual basis, up to April 30 or when the vehicle is purchased or rented. Quarterly payment before the 25th of the month following the reported trimester. Depending on the occupied area, location, type of goods. Tax for providing public 500 lei / vehicles with maximum 8 seats motor transportation 1,000 lei / 9/16 seats, 1,500 lei / 17-24 seats, 1,900 / 25-35 services on localities’ seats, 2,100 lei / 36 … seats routes Depending on the transportation unit and depending on the number of seats. Natural resources tax, 1 leu / 1 c.m. of water extracted from the water fund market tax, car parking 16 lei / 1 c.m. of mineral water extracted for bottling tax, etc. 0.06 lei / 10 c.m. of water used by hydropower plants A relevant report shall be submitted to the territorial IFS, and payments have to be made to the administrative-territorial units’ budget before the last day of the month following the reporting period. 24
  27. 27. GHIDUL ANTREPRENORULUI pe înţelesul tuturor 11. What reports, declarations, basic forms do you have to submit? Territorial off. Type of declarations/reports Submission term CNAM Nominal registration list (2 copies) for each person employed/discharged apart Before the 7th of the month following the employment/discharge CNAS The REV1 + REV 2 declaration (1 copy) for each employee/founder who does not have the CPAS code Within 10 days after the employment date + copy of the identity card of the insured person. The REV2 form is made up of 2 parts, after filling it in, one goes to the business, another one – to the CNAS territorial subdivision. Quarterly, before the 15th of the first month of the following trimester. Individual entrepreneurs and patent holders have to submit the 4 BASS Declaration on an annual basis, before 10 January of the following year. 4 BASS Declaration REV5 + REV2 Declaration (1 copy) for each employee apart, on paper format (up to 10 employees), and on electronic format as well (compulsory) for more than 10 employees. On a yearly basis, before 25 February (for up to 25 employees), or before 25 April (for over 20 employees). The verso of the REV2 form shall be filled in only in case of the packs containing the REV5 forms. Annual financial report SNC5 (balance sheet) On a yearly basis before 31 March of the following year. It has to be submitted by companies with over 49 employees and a revenue of over 15 mln lei. On a yearly basis, before 31 March of the following year. It has to be submitted by companies with over 49 employees and a revenue of over 15 mln lei. On a monthly basis, before the 10th of the following month. On a quarterly basis, before the 25th of the following month. BNS Simplified financial report SNC4 Report 1M (labour remuneration) Raportul 5C (consumurile şi cheltuielile întreprinderii) IFS TAT 07 (territory development tax) MED 08 (deductions for the medical insurance premiums) VAT declaration and the TVA FACT Form annex IRV 09 IAL 09 (lease payments, payments made to physical persons) IAS 09 (employees) VEN 08 (income tax by legal entities) On a quarterly basis, before the last day of the following month. On a monthly basis, before the last day of the following month. On a yearly basis, before 31 January of the following year (if the IRV 09 was submitted). On a yearly basis, before 31 March of the following year. It is developed in parallel with the financial report. Templates of declarations, forms, reports 12. What documents and software do you need for accounting? Go to the State Enterprise Editura de Imprimare Statistica and buy: • Certification sheets • Standard type forms of primary documents with special regime • Production forms Address: MD-2001, Chisinau, 34, Bucuresti Str., Tel: 022 275 391 (production department) or tel: 022 270 789 (administrator Vitalie Pavlov) E-mail: statistica@editura.mldnet.com 25
  28. 28. Documents you have to submit to the publishing house when placing the order: 1. Registration certificate (original and copy) 2. Abstract from the register (original and copy) 3. Identity card (original and copy) 4. Stamp You can also order these forms electronically, on the following website: www.stat.hq.md In case you place an electronic order, you will be asked for the following information: • Personal data: full name, telephone number, e-mail, Skype, messenger, • Data on the company: legal name, fiscal code, telephone number, the address on which the order is made, e-mail, website; • Delivery time, or the exact date and hour for the delivery address. ATTENTION!: All forms are numbered and you have to use them strictly in order. In case of a mistake, you have to cancel it, by writing CANCELLED, and keep both copies. What do you have to buy at the initial stage? • Shipping invoices (in case you are not a VAT payer, it is issued when making a delivery of goods or services); • Vehicle log book (to write off the fuel, in case you have vehicles being used by your firm); • Document on the purchase of goods (when you buy something for your firm from a legal entity); • Document on the purchase of lease services and associated costs; • Commissions (to mandate others to sign on your behalf, without giving them the stamp). • Payment notes (when you do not have a cash register and your activity implies that you have the right to make cash settlements without having a cash register, or when the cash register is out of order and you have stated this to the IFS); • Copying paper (2) – to fill in invoices, etc. Types of activities where you can make cash settlements without cash registers Marketing of agricultural products cultivated by economic agents on their own or rented land – in markets, fairs and other places authorised by the local public administration. Marketing by peasant (farmer) farms of agricultural products to other economic agents, as well as agricultural services provided by these, with the issue of payment notes. Marketing of cult objects and religious literature, rituals and ceremonies carried out by religious organizations in places of worship. Marketing of newspapers, magazines, lottery tickets. Services provided by the urban (communal) transportation based on travel tickets and/or subscriptions (at a fixed price, printed). Veterinary services, services for the urgent repair of dwelling space, engineering installations, furniture, home appliances, provided by economic agents to the population, at client’s location, with the issue of payment notes. Pharmaceutical activity in medical units in rural settlements without pharmacies, with the issue of payment notes. Activities carried out by patent holders on the basis of the patent of entrepreneur Activities for which the computerised control and administration system assures the issue of fiscal invoices on special paper with protection signs, printing the series and number of the fiscal invoice from the diapason assigned by the Main State Fiscal Inspectorate, which are also fulfilling the function of payment notes (payment in cash). Activity of financial institutions, licensed and regulated through the normative acts of the National Bank of Moldova, except for the currency exchange operations to physical persons Reception (collection) of compulsory fiscal payments, as well as of non-fiscal payments by fiscal bodies and/or mayoralties, with the issue of the strict registration documents of the State Fiscal Inspectorate. Provision of services by advocates. Notarial activity. Reception of payments for services through self-service ATMs issuing cash payment receipts Providing meals to pupils and staff in the general primary and secondary educational institutions during the academic year. At the end of the daily management, the special regime primary document shall be filled in – the payment note, containing the totality of performed commercial transactions. Marketing to the population of food service related products and services during fairs, exhibitions, festivals and various cultural-sports events – in parks and streets, as well as in other public places, authorized by the local and/or central public authorities with the notification of the respective fiscal body. At the end of the daily management, the special regime primary document shall be filled in – the payment note, containing the totality of performed commercial transactions 26
  29. 29. GHIDUL ANTREPRENORULUI pe înţelesul tuturor As for the rest, for cash settlements, you must have a cash register (CCM – cash control machine). For this: Step 1. Buy from firm X the following: 1. Cash register (2 000 – 5 700 lei) 2. CCM Register 3. Technical register Step 2. Firm X registers the cash register with the territorial IFS, based on the documents listed below. Step 3. Firm X gives you the documents from the IFS within maximum one week and will train you how to use the cash register and to fill in the registers. To register the cash register with the territorial IFS, you will need the following documents: • Template application • Copy of the registration certificate / copy of fiscal code assignment • Copy of the abstract from the state register • Copy of the Licence on the activity profile of the enterprise • Copy of the document on the CCM purchase • Copy of the Contract on the CCM technical maintenance • CCM register • Technical register (technical passport) of the CCM • CCM user’s manual The firm you have purchased the cash register has to provide you with the following documents: • Technical register • CCM user’s manual • Contract on the technical maintenance of the cash register • Invoice ATTENTION!: 1. You have to keep the cash book during the whole period of operation of the cash register and 3 years after its deregistration. 2. At the beginning of the fiscal year you must submit the cash book for the previous year to the IFS (even if it has not been completed yet) and to register a new cash book, for the current year. The same you have to do when the cash book is completed before the end of the year. 3. You have to produce the Z report on a day-to-day basis if fiscal receipts have been issued. 4. The Main State Fiscal Inspectorate, the Financial Guard and their territorial subdivisions are verifying the use of the CCMs Removal and application of the seal on the CCM is performed in the following situations: - When the CCM is registered with the territorial IFS; - When mandated persons are carrying out controls, if necessary; - If a repair or technical maintenance is required, with the opening of the CCM. Regulation on the registration and control over the use of cash control machines. Specialised software for accounting records As a rule, there are specialised software keeping accounting records, like “1 C: Contabilitatea 8.” This software is for the automation of the accounting and fiscal records, including the compulsory production of reports at the enterprise, in line with the Moldovan legislation in effect. This software is a licenced one and must be purchased from authorized persons 27
  30. 30. Advantages of “1C: Contabilitatea 8”: • • • • • All records are made in one software; Automation of the organizational and economic activity; Possibility to keep records of various types of commercial activities in one data base; Performs calculation of wages and staff administration; Wide opportunities for administrative recording and structure of analytical reports, supports multicurrency recording. IImplementation of 1C is performed with the support of the instructor from the authorized company. The software will cost you between 300 and 700 US dollars, depending on the complexity of operations you have to perform. To work with this software, you need to attend a training course (minimum one month, 40 academic hours, average cost – 400 lei). ATTENTION!: Accounting must be kept permanently, from the very first day your enterprise is registered and during the entire period of its existence, even in periods of economic inactivity, because you need to produce fiscal, statistical, social and medical insurance reports, as well as other reports. Employing a bookkeeper or contracting bookkeeping services? In the case of SMEs, the bookkeeper may be employed part-time and paid according to the number of worked hours, based on a service contract. This would cost you about 500 - 1,000 lei/month, depending on the amount of work performed by your firm. The bookkeeper must be a reliable and qualified person with rich experience. This is the type of person you should not make savings from his/her salary, in order to avoid paying later penalties and fines. The average salary of a qualified bookkeeper is 300 euro What is better, to employ a bookkeeper or to contract outsourced bookkeeping services? Employing a bookkeeper Confidentiality of data; Better knowledge of the firm’s situation; Responsibilities are transferred to the contracted company (certain bookkeeping operations, for example, primary bookkeeping, calculation and transfer of income taxes); Promptness in solving urgent problems; Specialized bookkeeping solutions The bookkeeper deals with your firm only or/and has an established work programme. “Outsourcing” firms have advanced technologies or software packages able to immediately improve some outdated bookkeeping computerised processes; Permanent presence in the office; Advantages Contracting bookkeeping services Disadvantages Good quality/price ratio. Permanent expenditures – bookkeeper’s salary; You have to provide him/her with working space; You have to set up his/her working space. Costs related to the digitalization of bookkeeping documents (costs of a large capacity scanner, of software packages may exceed the costs of the outsourcing service); A third firm might discover irregularities in the activity of your firm. 28
  31. 31. GHIDUL ANTREPRENORULUI pe înţelesul tuturor 13. What is the authorization procedure? After the state registration, the enterprise has to obtain various special authorizations in order to start up and run a business. Authorization – licences, permits, certificates, notifications, approvals, coordinations. Authorization = an act of authority of the local public administration, granting the right to carry out a certain activity, based on certain documents specific for each type of application apart. According to the Moldovan legislation, certain activities are subject to licensing and/or authorization. There are several types of authorizations, for confirming certain technical requirements, separate norms under a certain aspect, for example: sanitary authorization, veterinary sanitary authorization, activity and import/export authorization, retransmission authorization, etc.: Sanitary authorization – for all trade, public catering and social service units. Veterinary sanitary authorization for functioning – issued to agro-food markets, eggs selling booths, veterinary pharmacies, units marketing cut meat and fish, products of animal origin. The most frequently met is the sanitary authorization. Who is subject to the state sanitary-epidemiological supervision? Any economic unit or parts of it, regardless of its ownership form, for which sanitary-hygienic and antiepidemical requirements are established and which requires the supervision of their observance, except for those objects where there are no people working, and the labour and environmental factors (air, water, soil, food products) do not have a negative influence over the population’s living environment and health What is subjected to sanitary authorization? Entrepreneurship activities representing risks for the health of the population and which do not run counter the sanitary legislation in effect. List of authorizations, approved by the Government Decision No 920 of 30.08.2005. Types of activities subjected to sanitary authorisation. Who requests the sanitary authorization? The administration of economic units, to which the object(s) subjected to the state sanitary-epidemiological supervision is subordinated, according to requirements mentioned in the “Sanitary authorization for functioning.” When applying for an authorization, the administration has to specify the type of activity the authorization is sought for. Economic agents bear personal responsibility, according to the legislation in effect, for creating optimal working and health and safety conditions for their employees, and for the quality of food and products they produce or sell (store) to the population. What is the procedure for obtaining a sanitary authorization? The economic agent has to submit a request according to the template to the territorial preventive medicine institutions. The sanitary authorization procedure by the institutions of the State Sanitary-Epidemiological Service is conducted within 10 working days from the submission of the application and of the necessary documents. When ready, the authorization for functioning is signed by the chief state sanitary doctor of the territory (of by his deputies). Supervision materials, results of laboratory investigations and previous measurements (not older than 12 months) can be used for the purpose of the authorization process. 29
  32. 32. PFor the newly built, reconstructed, reprofiled, upgraded (primarily) the authorization shall be issued at the commissioning acceptance stage,with the following documents submitted: a) Copy of the registration certificate of the economic unit; b) Copy of the property deed or space lease agreement; c) List of groups of products/goods, that have to be manufactured, stored, marketed (to be included in the application). To extend the sanitary authorization for functioning, in the case when no amendments to the activity type were performed during the reference period, the application shall be accompanied by the report on the attestation results of the work places. In case of changing or extending the activity, the respective economic unit shall apply to the territorial preventive medicine institutions for a new sanitary authorization. If the economic unit does not meet the sanitary-epidemiological functioning conditions it has been authorized for, and the administrator did not suspend the functioning of the object on his/her own initiative, the chief state sanitary doctor of the territory shall withdraw the sanitary authorization by issuing a decision on suspending the activity of the enterprise. The activity shall also be suspended if the unit is functioning with an expired sanitary authorization. Economic agents are obliged to inform institutions of the State Sanitary-Epidemiological Service about amendments in the unit’s structure and exceptional circumstances (breakdown of backbone aqueducts, water intakes, water treatment stations, sewerage network, ventilation system, intoxication and professional diseases cases, etc.). Economic agents may contest decisions of the chief state sanitary doctors (their deputies) on the sanitary authorization (approval) of objects according to provisions of the Law No 1513 of 16.06.1993 on the sanitary and epidemiological support to the population (art.44). The location and functioning of the itinerant trade network is allowed only with the approval by the territorial hygiene and epidemiological centres and based on the sanitary authorizations for such type of activity DECISION OF THE MOLDOVAN GOVERNMENT on the approval of the Regulations on the functioning of itinerant trade network and trade Regulations in markets in the Republic of Moldova, No 517 of 18.09.96. Authorizations for functioning issued by the Local Public Administration To conduct certain trade activities, you will also need the authorization from the local public administration. The trade and public food service directorates of the municipal mayoralties and district executive committees issue authorizations for the location of trade units. In Chisinau, the City Hall issues the following authorizations to trade units and/or service provision units: Period For trade units and/or service provision units: Up to 5 years Located on private property areas Not more than 5 years Located in rented areas Up to 3 years Stands and pavilions Up to 1 year Stalls, stands, trailers, vehicles and other iterant – temporary trade units The authorization for functioning is issued within maximum 15 working days after the submission of the application and documents. 30
  33. 33. GHIDUL ANTREPRENORULUI pe înţelesul tuturor 14. What is the licensing procedure? In order to be issued a license, legal entities have to submit an application to the Licensing Chamber, with the following data indicated: • • • • • • Full name of the enterprise; Legal address; Fiscal code; Type of activity subject to licensing; Address of branches; List of documents attached to the application confirming the competence to carry out the type of activity the license is sought for. Documents to be attached: • • • Copy of the registration certificate of the enterprise; Certificate confirming the enterprise has no debts to the state consolidated social insurance budget; Other documents depending on the licensing conditions of one or another type of activity. The Chamber will consider the submitted documents and will approve the decision on issuing the license or on rejecting the application within a maximum term of 15 working days, from the day the application is received. The notification on the decision approved will be sent to the applicant in written form, within a maximum of 3 working days from the date the decision is made. Licensing authorities: - Licensing Chamber (issues licenses for the majority of activities); - National Bank of Moldova; - National Commission of Financial Market; - National Energy Regulatory Agency; - National Regulatory Agency for Electronic Communications and Information Technology; - Coordinating Council of Audiovisual. Contact details for the Licensing Chamber Address: Republic of Moldova, MD-2001, Mun. of Chisinau, 124, Stefan cel Mare Blvd Contact information: tel. (+373) 22 54 21 14, hot line (+373) 22 27 22 21 Web: http://www.licentiere.gov.md/ Types of activities governed by licensing: Law 451/30.07.2001 on licensing some types of activities. Types of activities proposed to be entirely removed from the fields governed by licensing. http://www.licentiere.gov.md/public/files/Ghid/Taxe_genuri_16.02.11.pdf 15. What is the trademark registration procedure? Trademark – any sign or combination of signs that can be represented graphically, serving to differentiate products or services of certain physical persons /legal entities from others’. The most frequently met types of trademarks are: verbal, representational, combined, tridimensional, and of other type. The competent body authorized to register trademarks in Moldova is the State Agency for Intellectual Property of the Republic of Moldova (AGEPI). www.agepi.md How do you register a trademark? To register a trademark, you have to fill in the template application for trademark registration îand submit it to the AGEPI. The application must refer to one trademark only. Cererea trebuie să se refere la o singură marcă. 31
  34. 34. The application shall contain: • formularul cererii, prin care se solicită înregistrarea mărcii; • reprezentările grafice ale mărcii. The template application requesting the trademark registration; Graphic representations of the trademark. A number of other documents, according to the Regulations on the trademark submission, examination and registration procedure, might be also submitted upon request. Trademark registration stages: • Submission of the application; • Examination of the observance of conditions for submitting the trademark registration application; • Publication of the submitted application data; • Examination of the application; • Trademark registration and issue of the protection title. Each stage is performed over a certain period of time. Any physical person or legal entity is entitled to submit a trademark registration application both in Moldova and abroad. The holder of the registered trademark has the exclusive right to own the trademark, to use it and to ban the unauthorised use of it. The validity term of the trademark’s registration is 10 years; it can be renewed for another 10 years whenever it’s necessary. Fees for the trademark registration service Templates from AGEPI (http://www.agepi.md/md/trademarks/form.php AGEPI contact information: Tel. (+373-22) 400607, 400608; Antechamber: (+373-22) 400500; Fax: (+373-22) 440119 24, Andrei Doga Str., Block 1, Chisinau, MD-2024, Republic of Moldova 16. How do you manage human resources? For your company to operate efficiently, you need high-skilled, sufficient and motivated staff. To this end, you will have to undergo the following stages: 1. Planning 2. Recruitment 3. Selection 4. Employment 5. Training 6. Motivation 7. Control 8. Appraisal Labour Code of the Republic of Moldova 1. PLANNING “People are definitely a company's greatest asset. It doesn't make any difference whether the company's product is cars or cosmetics. A company is only as good as the people it keeps.” (Mary Kay Ash) 32
  35. 35. GHIDUL ANTREPRENORULUI pe înţelesul tuturor How many people do you need to start a business? When starting a business, you have to save as much money as possible on salaries and to prepare yourself morally to do the job of several people. At the initial stage, you will have to learn to be: 1. manager 2. office manager 3. accountant, courier 4. marketing and sales manager 5. human resources manager Being in charge of several fields in the company will give you the advantage of drafting the job description, as you will know precisely what the assignments of vacancies are and, last but not least, you will be able to better keep under control your employees, because you will already know what they will have to do and how much time every task takes. However, if you feel that you are unable to assume all the above-mentioned roles, you will have to resort to services provided by specialists (accountant, sales manager) and you may need to employ a personal assistant (who should carry out the duties of office manager, courier and help you with daily tasks). You may pay the accountant per hours, and the sales manager may be remunerated on the basis of a commission from contracts signed for the firm (thus you will take minimum risks and make minimum investments). The planning of staff should be directly proportionate to: - workload - complexity of tasks - the incomes of the enterprise - your qualification Your main goal is to form a strong team with good personal and professional qualities. Try not to hire relatives, friends and acquaintances only because they are looking for a job and would like you to help them. You should think first of all of the real capacity of your enterprise and of its ability to meet payments. The staff planning should be worked out in a strategic manner and coordinated with the financial forecasts What is the organizational structure of an enterprise? Organizational structure = all people, organizational subdivisions and relations between them, established in such a way as to meet the planned objectives. An organizational structure should: • point out the objectives and action plan • showcase the authority able to manage the enterprise; • highlight the framework within which activities are held. The organizational structure can be: 1. of leadership or functional form 2. of production or operational form. Here are some examples of organizational structures: DIRECTOR-GENERAL RESEARCH AND DEVELOPMENT DIRECTOR PRODUCTION MANAGER COMMERCIAL AND MARKETING DIRECTOR ECONOMIC DIRECTOR HUMAN RESOURCES DIRECTOR HEAD OF EXPORT SERVICE 33
  36. 36. DIRECTOR SECRETAR BIROU JURIDIC ACCOUNTANT RELAȚII CLIENȚI MANAGER SUPERVISORS INSTRUCTORS PERSONAL CURĂȚENIE C PROJECT MANAGER D PROJECT MANAGER DIRECTOR-GENERAL A PROJECT MANAGER B PROJECT MANAGER EMPLOYEE 1 EMPLOYEE 1 EMPLOYEE1 EMPLOYEE 1 EMPLOYEE 2 EMPLOYEE 2 EMPLOYEE 2 EMPLOYEE 2 EMPLOYEE 3 EMPLOYEE 3 EMPLOYEE 3 EMPLOYEE 3 These parts include the following components: position – all objectives, tasks, competences and responsibilities assigned to every employee of the company for certain periods of time; assignments – leadership and executive assignments; department – the totality of some similar posts and assignments, in which people specialized in a certain sector operate, and which are located in a certain area and are subordinated to a single person; organizational relations – links between the component parts of the structure: authority, cooperation, control and representation relations; hierarchic weight – the number of people headed by management personnel; hierarchic level – all organizational subdivisions. The number of hierarchic levels depends on the size of the company, the diversity of activities and the complexity of production. 2. RECRUITMENT Personnel recruitment = the process of ensuring a sufficiently high number of high-skilled candidates in order to select those who meet the best the requirements of the posts that your enterprise needs. What to pay attention to when recruiting your staff? When a vacancy appears, first of all make sure that this post is still needed or perhaps you may reassign its tasks to already existing positions; Identify and attract the highest possible number of candidates in order to ensure the needed number of employees in terms of both quantity and quality; Recruit in the shortest time possible and make the lowest spending possible. 34
  37. 37. GHIDUL ANTREPRENORULUI pe înţelesul tuturor When recruiting, you must have all information about the features of the position, as well as the qualities of its future holder. A basic job description must include: 1. The name of the post 2. The place of the post in the organizational structure 3. Main assignments 4. Responsibility 5. Requirements (Technical Knowledge, Experience, Abilities) 6. Success criteria 7. Role of the position Sample job description RECRUITMENT SOURCES TMENT Sources inside the company present employees their friends and relatives previous applicants Sources outside the company colleges and universities vocational schools specialized agencies employment agencies, labour market other enterprises Advantages: - you get to know better the strengths and weaknesses of w the candidate; - you attract candidates more easily - recruitment takes place faster and is less expensive - employees feel that you trust them and take into consideration their recommendations. Advantages: - you may attract a higher number of possible candidates; possi - new employees = new sources of ideas and new knowledge; - less spending on staff training. Disadvantages: - you don’t benefit from new ideas that new employees may bring in; - conflicts may erupt between employees; - employees that were not promoted may be disheartened. Disadvantages: - risk of employing people who will fail to cope with the position; - staff recruitment cost is much higher; - it will take longer for the new employees to find their way about and to integrate into the team. How to recruit staff? 1. Advertising – you post an advertisement describing the position. It should be worded as precisely and politely as possible. It should be distributed on the largest possible area in order to get a maximum number of people meeting the criteria specified in the description. 2. Ask your acquaintances for recommendations – ask your colleagues, associates, acquaintances to provide information about people interested in the vacancy. 3. Go to higher education institutions – and talk directly to graduates, find a person whom you would “grow up” (in whom you will invest time and money), but who will be loyal to you for a longer period. 4. Use headhunting agencies which persuade high-skilled people from other companies to come to you. In this case, you will have to pay for the agency’s services, to offer a higher wage and better working conditions. 35
  38. 38. Useful tips: • Do not hurry to employ; • Say NO to nepotism; • Pay attention to young people who have the potential and willingness to work; • Do not avoid hiring aged people – they may have excellent experience in the field; • Pay specific attention to personal qualities of potential employees; • Call the phone numbers mentioned in CVs to check the truthfulness of the provided info. Recruitment websites: www.angajare.md www.jobinfo.md www.makler.md www.anofm.md www.joblist.md www.moldovajob.md www.bestjobs.md www.jobmoldova.md www.munka.md www.cariera.md www.joburi.md www.rabota.md www.hr.md www.locurimunca.info www.topjobs.md 3. PERSONNEL SELECTION Personnel selection = choosing the most competitive or appropriate candidate for a certain vacancy in line with certain criteria Process of selecting Human Resources 1. Employment application, submitting a CV and a cover letter 2. Pre-selection interview 3. Selection test 4. Comprehensive selection interview 5. Checking references (recommendations) 6. Medical test 7. Employment decision, assigning the post As a rule, interviews have two to three stages, so that you get to know as much as possible about potential employees. Tips for interviews: • Let the interviewee speak more; • Analyse the candidates’ strengths and weaknesses, their previous career; • Do not ask questions implying the answer; • Be polite and listen carefully to the candidates’ personal presentation; • Give some easy task to potential employees to see how they cope with it; • Give no feedback during the interview. After the interview, make an objective analysis of the gathered information and select the person who meets the job description the best and who would integrate better into the current working team. It is very important that the job requirements match the employee’s skills. Holding an inappropriate position may demand additional efforts and time from the employee. So, you need “the right person for the right post”. 36

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